Democrats are holding the government hostage in a prolonged government shutdown over temporary COVID-era Affordable Care Act (ACA) subsidies aimed at making health insurance cheaper — or free — for millions of Americans during the pandemic. But as with most remnants of the pandemic, the costs of these subsidies far outweigh the potential benefits.
Instead of forcing an extension of the temporary, scaled-up subsidies through the spending bill, policymakers should let them expire at the end of the year and instead focus on health care reforms that actually help patients.
According to Democrats, including Joe Biden, the bloated COVID-era ACA subsidies were always intended as a temporary “economic bridge through the crisis,” rather than a permanent expansion of government. But now Democrats are claiming that a return to pre-COVID Obamacare would be a catastrophe — a not-so-tacit admission that the health insurance system they have praised for the past fifteen years is broken. And it isn’t.
As with most remnants of the pandemic, the costs of the Obamacare subsidies far outweigh any potential benefits. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
As mothers who manage health care for our families, we have witnessed the failures of the health care system. When Mary Katharine was seven months pregnant and her husband tragically passed away, she was told she had lost her third or fourth health insurance policy since the ACA was passed, leaving her with a costly, ineffective plan despite Obamacare’s promise that she could keep her insurance if she liked.
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To make the already broken ACA system worse, Biden’s stopgap measure increased the dollar amount of ACA subsidies and expanded the number of people eligible for taxpayer assistance. Instead of helping those in need, these subsidies go directly to the insurance companies – boosting their profits at the expense of American taxpayers and creating a breeding ground for enrollment fraud and abuse.
The subsidies, together with weakened income verification, have led to a skyrocketing increase in improper registrations. According to the Paragon Institute, more than 6.4 million people were wrongly enrolled in 2025, costing taxpayers $27 billion.
The number of zero-claim enrollees, people who are enrolled but have never filed a claim, have also skyrocketed, indicating widespread fraud. Forty percent of those enrolled in fully subsidized plans filed zero claims, compared to the typical 15% of zero claim enrollees in private plans.
And because ACA subsidies are based on current income without considering assets, even wealthy people can claim full subsidies and get free coverage. A couple with $1.5 million in investable assets who retired at age 46 to travel the world bragged on Reddit that they are getting the maximum ACA subsidy while “on a five-month slow travel tour of the British Isles and Ireland, a dream trip.”
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Dream for them. A nightmare for taxpayers and the vulnerable Americans whose coverage and care are diluted by those who abuse the system.
Republicans in Congress and the White House rightly recognize the American people’s outrage over doling out increased subsidies to bloated insurance companies when cost-effective, patient-centered healthcare solutions exist.
Contrary to misleading polls from the Kaiser Family Foundation and The Washington Post, a recent poll from Americans for Prosperity found that when voters were given a neutral description of the subsidies and the two alternatives — extending the scaled-up subsidies or returning to pre-COVID-19 subsidies — 38% favored letting them expire, 30% wanted them extended, and a third were undecided.
The poll also found that 66% of American voters – including 27% of Democrats – would prefer Congress to expand free market options such as health savings accounts and direct primary care over extending expiring subsidies (17%).
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These free market solutions are promising when it comes to reducing healthcare costs and enabling more personalized care.
For example, in direct primary care, physicians work on a monthly retainer instead of insurance coverage, a Netflix-style subscription model that reduces administrative burden and paperwork, leaving more time for doctor-patient interactions.
Removing barriers such as telehealth restrictions and “certificate of need” laws that require state approval to open a hospital would also reduce costs and increase access.
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And HSAs – tax-advantaged savings accounts that allow individuals to save and pay for qualified medical expenses – give patients more choice and control over their medical decisions. We’ve seen the benefits of HSA firsthand. Lauren uses an HSA to get faster, higher quality care by avoiding insurance paperwork and network approvals. We are encouraged that access to these plans will expand to an additional 1.6 million Americans by 2026, thanks to the Working Families Tax Cuts legislation. But more needs to be done.
The government shutdown should serve as a wake-up call to break the status quo and provide families with better health care options. With fraud, waste and rising costs undermining the current system, it’s time to move to solutions that put patients, not bureaucrats or insurers, in control.
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Lauren Stewart is a senior federal legislative liaison at Americans for Prosperity and Concerned Veterans for America.
